SBD/September 28, 2011/Franchises

FS West Files Lawsuit Against Dodgers To Halt Sale Of TV Rights

FS West is alleging the Dodgers' plan to market TV rights tramples on its existing deal
FS West last night filed a lawsuit in bankruptcy court against the Dodgers, alleging the club's plan to market its TV rights tramples upon the RSN's existing rights. The suit, filed in the U.S. Bankruptcy Court for the District of Delaware, seeks an immediate injunction against the Dodgers' proposed rights marketing process, as well as unspecified damages. Similar to MLB's recent motion to strip the club from Owner Frank McCourt, the FS West lawsuit seeks to put an immediate halt to the TV rights sale that is the centerpiece of McCourt's reorganization strategy. FS West's current rights with the Dodgers extend through the '13 season, including an exclusive negotiating period into November '12. "The telecast rights to the Los Angeles Dodgers baseball games are an inherently unique and irreplaceable asset and business opportunity," the suit reads. "[FS West] will suffer great and irreparable injury unless [the Dodgers] are enjoined and restrained by order of this Court from further breaches." FS West further asks the court to reject any sale that does not uphold the current rights agreement, which in addition to the exclusive negotiation period allows it to match other bids.

FANS WANT A SAY: The RSN, which also alleges the Dodgers shared confidential contract data with outside parties, was not the only entity petitioning the court yesterday. A group of season-ticket holders, thwarted over the summer in getting recognized as an official committee in the case by the U.S. Trustee assigned to the matter, filed a motion directly with Judge Kevin Gross seeking the recognition. "The reality is that [the Dodgers] have opposed the basic desire of its most loyal and financially invested fans on whose goodwill they are dependent -- the season ticket holders -- to have a seat at the table in this reorganization," the motion reads in part. "[The club's] assertions that the interests of the season ticket holders will not be adversely affected during this bankruptcy case is just plain wrong. ... Is the value of season tickets, which season ticket holders have a right to sell, being preserved or adversely affected by actions taken by the estates during these cases?" The motion further argues that the existing creditors' committee does not necessarily share the same interests and goals as the season-ticket holders. The matter is slated to be heard Oct. 25.

FILING AN OBJECTION: MLB, not surprisingly, late yesterday filed its own objection to an emergency hearing being held today on a variety of matters, most notably the league's motion to the court to order a sale of the team from McCourt. The Dodgers are seeking the emergency hearing in pursuit of an adjournment of that bid to strip the team. But MLB said, "There simply is no reason for considering the motion to adjourn on one day's notice" (Eric Fisher, SportsBusiness Journal).

STAR WATCH: In L.A., Bill Shaikin reported a memo sent to Dodgers players yesterday by the MLBPA indicated that the union "intends to monitor the Dodgers' off-season spending 'very carefully.'" MLBPA Exec Dir Michael Weiner in the memo wrote, "To date, all Dodgers players have received all the monies they are owed. ... While it is not at all clear how these issues will ultimately be resolved, we expect that the Dodgers' players will continue to be paid and we continue to receive assurances from MLB that that will be the case" (LATIMES.com, 9/27). Also in L.A., Dylan Hernandez noted under McCourt, the Dodgers "haven't shopped in the high end of the free-agent market." But Dodgers GM Ned Colletti said that that "could change, even if the player they want could cost them more than $150 million." Colletti said that he "is 'very conscious' of the Dodgers; declining attendance figures." The team for the "first time ever" was "outdrawn by the neighboring Angels." Asked whether the Dodgers would "consider signing a star-caliber player as a goodwill gesture toward an increasingly disgruntled fan base," Colletti said, "It can be taken that way. But you're still going to have to win" (L.A. TIMES, 9/28).

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